Business Why banks' engagement strategies can be short

Why banks’ engagement strategies can be short

-

- Advertisment -

Matt Gillin is CEO and co-founder of relay networka complete customer engagement solution for the enterprise.

My company recently commissioned Forrester to do this an investigation on customer withdrawal from banking. As the CEO of a customer engagement solution, the results supported much of what I already knew: that banks and credit unions want to establish connections, but they struggle to keep customers from passive — and sometimes actively — withdrawing.

While the survey results didn’t surprise me, there were a few points that jumped off the page.

First, I thought it was telling that many banks and credit unions seem to be focusing most of their efforts and resources on technology rather than content. They are investing more in technologies designed to acquire customers and understand customer habits, rather than technologies designed to nurture and build relationships with customers through meaningful, relevant content.

Second, banks and credit unions seem to be in the midst of a communication problem. Even though they know their customers better than ever and reach them through various channels, they often struggle with cadence and content.

Of course, banks do business to make money and build value for stakeholders. But as many banking services have become commonplace, more so than most industry sectors, banks depend on their ability to drive and maintain customer loyalty and advocacy as a primary differentiator. So, what’s stopping banks from being more cohesive with their customers and delivering the right content the way consumers are most likely to consume it?

Let’s dive a little deeper.

Engagement efforts stall. It’s time to prioritize customer retention.

It’s clear that companies value customer engagement, but struggle to make real, lasting connections. One set of our survey responses tells the story: When asked to compare reasons for deploying specific customer engagement tools and strategies, responses indicated that banks and credit unions spend less time on content that targets existing customers rather than new ones. Of the 12 categories of tools and strategies listed, decision makers said 10 more were used for customer acquisition, while only two were positioned for nurturing existing customers.

Our research found that banks and credit unions are investing more in technologies that focus on the customer journey than in content that keeps existing customers engaged. It also showed that they prioritize less on content and much more on back-end processes, such as analytics and data modeling, to attract new customers.

Of course, I’m not suggesting that banks stop their customer acquisition efforts; rather, I suggest putting in the same amount of effort to maximize the value of existing customers. in 2018, PwC noted that few banks “have even begun to evaluate how to develop their marketing and outreach strategies, despite the fact that the way customers interact with banks is changing.” More recently, our research found that 66% of customers are disengaged, and a recent Qualtrics report stated that disengaged customers 50% more chance to churn. So it makes sense that if you want to prevent churn, you need to keep customers engaged and bring the non-engaged back out of limbo.

Why do banks struggle to maintain engagement? Well, I’d say we start by looking at content and cadence: what are banks offering their customers? What is in their communication? What channel do they use to get in touch with that customer? Are they communicating in the right way at the right time? Banks and credit unions should strive to get to know their customers better and automate specific functions. If you don’t develop useful, relevant and meaningful content that can be easily consumed and interacted with, the customer is unlikely to engage.

Be specific with your customer communications.

It seems almost too obvious to write that the more you know about customers, the more you can focus on your marketing tactics. McKinsey found that providing personalized analytics insights can increase customer engagement. So if a customer is overdrawn, it may not be a wise idea to educate them about a high net worth savings account. Yet I hear from customers in every industry – not just banks – that they regularly receive irrelevant information and are inundated with too much communication from too many departments.

To address this issue, I think the banking industry as a whole should focus on two areas: better managing the customer information they collect and communicating as one voice to the customer in a way that isn’t creepy or spammy. When asked which of the 10 potential issues most impacted their ability to develop and sustain a single, cross-organizational communications strategy, 43% of bankers in our survey pointed to complex internal rules surrounding customer relationship ownership.

It’s easy to imagine the following scenario: Armed with piles of customer information, each department wants to improve its own KPIs by scoring points with customers. So the control department sends a customer one email promoting a new checking account. Meanwhile, marketing informs about an upcoming event and a credit card manager proposes a new rate – all within the same week. Or seven different departments send anniversary messages – all in the same day.

Gartner refers to the process of achieving the dual goals of ensuring consumer privacy and relevance by focusing their engagement efforts on delivering “tailor-made help.” Determine who owns custom help in your organization. Who is the traffic cop for your brand’s communication with each customer? The fragmented nature of the customer relationship makes it easy to say that the customer relationship stands alone rather than with the brand as a whole. But as consumers ourselves, we know that the customer does not see it that way.

Revise your engagement strategy.

It is important for banks, or indeed any business, to rethink their engagement strategies to ensure they are fulfilling their mission of providing maximum value to their customers as a way of getting maximum value in return. Ensure engagement investments consider contextual relevance, usability, and friction. And when dealing with the customer, do so in a coordinated organizational pattern through a mechanism that has a lifelong relationship approach rather than just delivering tactical results.


ukbusinessupdates.com Business Council is the leading growth and networking organization for entrepreneurs and leaders. Am I eligible?


Shreya Christinahttps://ukbusinessupdates.com
Shreya has been with ukbusinessupdates.com for 3 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider ukbusinessupdates.com team, Shreya seeks to understand an audience before creating memorable, persuasive copy.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest news

How rich is Albert DePrisco? Net worth, wife Lisa Niemi, Wiki

Introduction Not all people born to wealthy families are instantly famous. Some of them gain fame by marrying someone...

The rise of the virtual restaurant franchise

No one can deny that the global pandemic has had a profound impact on consumer habits and has changed...

Intel CTO wants developers to build once, run on any GPU

More than two decades ago, the Java programming language, originally developed by Sun Microsystems, offered developers the promise of...

FedEx will bring better news in 2023

One Look at FedEx Corporation's (NYSE: FDX) chart shows it's been a tough year. With the shipping and...
- Advertisement -

This is why you couldn’t see anything on House of the Dragon

have things dark On House of the Dragon last night when characters stole dragons and other characters made super...

GIC backs Indian EV startup Euler Motors with $60 million funding • ukbusinessupdates.com

Euler Motors, an Indian startup that designs and builds electric commercial vehicles, has raised $60 million in a new...

Must read

- Advertisement -

You might also likeRELATED
Recommended to you